Circular No. 04/2002/TT-NHNN guiding the implementation of the reduction of interest rates on loans by State commercial banks for traders in mountainous areas, islands, and ethnic minority regions under the provisions of Government Decree No. 02/2002/NĐ-CP dated January 3, 2002.

CIRCULAR

Guidelines for Implementing Reduced Loan Interest Rates for Commercial Banks by the State for Merchants in Mountainous Areas, Coastal Islands, and Ethnic Minority RegionsZones II, III Pursuant to the provisionsin Clause 2, Article 1 of Decree No. 02/2002/NĐ-CP dated January 3, 2002 of the Government 

Amending and Supplementing Certain Provisions of Decree No. 20/1998/NĐ-CP dated March 31, 1998 of the Government on Developing Trade in Mountainous Areas, Coastal Islands, and Ethnic Minority Regions; The State Bank of Vietnam guides state commercial banks to implement reduced loan interest rates for merchants in mountainous areas, coastal islands, and ethnic minority regions as follows: a. State commercial banks provide loans to merchants.

1. Scope of application:

b. Merchants borrowing capital include: individuals, legal entities, cooperatives, and households registered for independent and regular trading activities.

2. Merchants meeting all the following conditions shall be eligible for reduced loan interest rates from state commercial banks when borrowing capital:

a. Merchants have their headquarters or branches registered for operation in mountainous provinces or regions with mountains, coastal islands, and ethnic minority areas.

b. Merchants are assigned tasks and confirmed quantities, values, storage times, and retail periods for essential goods by provincial People's Committees; and confirmed quantities and values of agricultural and forestry products purchased in Zones II, III mountainous areas, coastal islands, and ethnic minority regions by district and city People's Committees. Types of essential goods for storage and retail are implemented according to the regulations of the Ethnic Minorities Committee and Mountainous Areas.

3. When there is a need for capital, merchants submit documents proving they meet the conditions stipulated in Point 2 of this Circular to state commercial banks. Merchants borrowing capital will have their loan interest rate reduced by 20% compared to the usual loan interest rate of state commercial banks at the time of lending. This reduction in loan interest rate will be recorded in the credit contract.

4. State commercial banks are responsible for ensuring sufficient capital and implementing loans in accordance with current legal provisions for merchants to store and retail essential goods and purchase agricultural and forestry products in Zones II, III mountainous areas, coastal islands, and ethnic minority regions.

5. State commercial banks reducing loan interest rates for merchants will be compensated by the State for the reduced loan interest rate according to the guidelines of the Ministry of Finance.

6. The reduction in loan interest rates for merchants as prescribed in this Circular applies to credit contracts signed from January 18, 2002. Remaining balances of loans and credit contracts signed with merchants in Zones II, III mountainous areas, coastal islands, and ethnic minority regions but not yet disbursed or partially disbursed by January 17, 2002, continue to be executed at the interest rate specified in the credit contract.

7. State commercial banks report to the State Bank of Vietnam every six months on June 30 and December 31 regarding the results of lending, debt collection, outstanding balances, and compensation for reduced loan interest rates for merchants to assess the implementation of the policy of reducing loan interest rates for merchants.

a. This Circular takes effect from the date of issuance.

8. Implementation:

b. State commercial banks and merchants eligible for reduced loan interest rates adjust the loan interest rates for credit contracts signed from January 18, 2002 to the effective date of this Circular.

c. Heads of units under the State Bank; Branch Governors of the State Bank in centrally governed cities and provinces; Boards of Directors and General Managers of state commercial banks are responsible for implementing this Circular.

Yang Thu Huong